CSPs Must Harness Digital Transformation To Remain Competitive

In today’s evolving technology landscape consumers are becoming more demanding and looking for a fantastic service, in an increasing choice of communication service provider (CSPs). This is highlighted by a recent report by Ovum that reveals 82 per cent of consumers have stopped doing business with a brand following a bad experience. As a result of this fickle “loyalty”, poor service and out of date offerings can quickly lead to customer churn. Quad play is increasingly becoming the norm, with many customers buying their communications services as a package, making this a problem that CSP leaders must take seriously to remain competitive.

CSPs are under constant pressure from the ever-changing relationship between customers and technology and must create brand and technology led service differentiation in such a mature and value led market.

As a result of this change in consumer expectations, enhancing customer satisfaction and strengthening loyalty have become top priorities for CSPs. A focus on improving productivity through process and organisational efficiency, restructuring to concentrate more on customers and reducing costs through value-oriented customer management, has led to fundamental changes in the way that CSPs engage with customers and in turn the longevity of relationships with them.

But to get to that point decision makers face a complex journey. The crucial factors to prepare for are:

• Service agility – developing personalised service packages, content and self-help tools, reducing time-to-market for new offerings and increasing competitive differentiation.
• Security –meeting customer demands for a secure, reliable service and protecting the business and brand.
• Innovation –using data analytics to increase understanding of customer trends to refine services, propositions and sales effectiveness and identify new revenue streams. Innovation also comes through automation, in order to rationalise and standardise products, networks, applications, platforms and processes. This aims to remove complexity, simplify customer engagement and drive down cost in a secure way.

This digital transformation journey can be mapped out on a road towards three main business outcomes. To thrive in this competitive marketplace, CSPs must strive for excellence in profitability, market share and brand reputation.

Profitability

CSP decision makers constantly need to find a balance between alleviating the pressure on revenues and margins caused by increasing standardisation of products and services, with the necessity of offering something new, exciting and different to customers in order to remain competitive.

Facing a decline in per user revenue, there’s a need to increase the capability and efficiency of their network infrastructure to drive new services and meet increasing customer expectations around speed of response, mobility and flexibility. There are also greater efforts to cut costs through less human contact and the use of portals which should be simple, clear and intuitive experiences, personalised across multiple platforms.

In many ways the business focus has not changed: Attract new subscribers by offering something different and increase Average Revenue Per User (ARPU) through cross-selling and up-selling and consequently reduce churn.

Service agility – An agile CSP must be capable of offering their customers a tailored service mix according to their needs. Agility also means being perceptive enough to identify changing customer demands and competitor actions and rapidly responding with a new offering. Any CSP – indeed any business – with the capability to roll out new products or services before their competitors can gain an immediate advantage. Given the modern customer’s emotional need to have everything now, the agile CSP must be seen to be better than their competitors at meeting sudden changes in demand.

Security – Security is a crucial aspect to maintain confidence and therefore retaining customers. Customers must be reassured that their data is secure and that if something does go wrong, the CSP has the expertise to quickly address the issue at no cost to the end-user.

Non-compliance of external security processes also increasingly runs the risk of fines or sanctions for the businesses, naturally affecting its profitability.

Innovation – Furthermore, digital transformation can enable the reduction of capital and operational expenditure by simplifying external and internal processes. For CSPs, this can come in the form of partly-automated self-service portals and templates to accelerate the development and refinement of designs, processes, systems etc. with an audit trail of changes.

Simplifying any process lowers the opportunity for errors and increases the speed of completion. In addition, reducing this complexity allows CSPs to focus on putting the building blocks in place to scale out a network and make it easier to diagnose and resolve issues. In many cases, we have seen second and third tier CSPs disrupting the dominance of their more established competitors, simply because automation of services is built in from the ground up as opposed to implementing it into a fully formed network built over many years.

Market share

In the age of digital transformation and with limited product differentiation, high quality service and customer self-services are central to building and maintaining brand loyalty.

Long term success is gained through protecting and growing market share, in other words by offering products and services that are perceived to have greater relevance and value than competitor offerings. A personalised offering is needed with a focus on delighting customers with tangible added value. A worldwide study by the Corporate Executive Board demonstrated that speed of solution, simplicity, and efficiency correlate closely with customer loyalty – the less time a customer has to spend obtaining a solution to a problem, the greater the level of loyalty.

However, outstanding customer service is only achievable if the infrastructure can manage the constant growth in network traffic this activity generates. If not, it can very quickly impact the customer experience.

Service agility – The agile, responsive CSP must quickly and easily create new services and test, learn, improve or drop according to market feedback. This enables them to up-sell customers, develop new revenue streams and learn about their changing needs, in turn improving market share.

Brand reputation

Building and maintaining a positive, high profile brand reputation is vital for all successful businesses and for CSPs that means delivering on their brand proposition during every single customer interaction and experience. Attracting new customers while also promoting churn of existing customers is a difficult balancing act, akin to filling a bucket with water from the top and stopping it from leaking from the bottom at the same time.

Today, the most important means of communication between brand and customer is via the web. Online channels offer opportunities to communicate more directly and interactively than ever before with specific target groups. However, the time and effort to build and maintain brand reputation is higher because of the diversity of new channels and the increasingly selective behaviour of consumers. Ensuring the network capability is in place to deliver the new service, and give it the best chance of success, is therefore critical.

A core component of every offering is securing and protecting customer and company data. When things go wrong, the damage to the brand can be significant, so action needs to be considered in key areas.

Security – Security when it comes to brand reputation is two-fold – being alert and responsive to vulnerabilities and threats but also positioning the company as a secure brand that customers can trust. With threats becoming more sophisticated all the time, CSPs must use the latest technology to protect their employee and customer data. This, allied with the use of analytics, means that they can monitor company assets and resources by providing visibility of day-to-day activities and assist in early identification and resolution of security issues. Furthermore, the ability to trace the fingerprints of an attack, sometimes weeks after an initial intrusion has been made, and across several systems, will become increasingly important.

Innovation – As previously mentioned, digital transformation enables the streamlining of processes, and this is no different when it comes to security. The simplification and standardisation of business and operational processes reduces the risk of potential security breaches and makes it easier to apply a consistent security approach across the organisation and network.

Vigilance and stringent internal processes encourage businesses to meet internal, national and international security standards, regulations and laws. This in turn shows that a CSP takes the protection of its customers and business data seriously. Automation is crucial in order to recognise and combat threats in real-time, but it is essential that intelligent decisions are made – for example recognising the difference between a sudden, upturn in traffic and a genuine DDoS attack.

It’s no secret, but it’s worth re-stating – the network is the business. Everything springs from it for communication service providers, be it profitability, market share or brand reputation. In an age of digital transformation, where customer expectations are higher than ever before, and competition is tight, it’s vital that CSPs deliver a consistent, high quality customer experience, and if something does go wrong, the ability to reassure customers they have the expertise to quickly address the issue must be in place. Getting this service focus right now is imperative as the impending impact of technologies like 5G and IOT will be upon us, creating further disruption in an already volatile market.

To read Axians’ full whitepaper on CSPs, please visit: http://www.axians.co.uk/assets/pdfs/csp-white-paper.pdf

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